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Open Access
Article
Publication date: 9 June 2023

Segun Thompson Bolarinwa and Munacinga Simatele

The paper validates the threshold argument in the informality–poverty nexus. Recent literature and policy have argued the existence of a threshold in the relationship.

Abstract

Purpose

The paper validates the threshold argument in the informality–poverty nexus. Recent literature and policy have argued the existence of a threshold in the relationship.

Design/methodology/approach

The study adopts dynamic panel threshold analysis, estimated within the framework of system Generalized Method of Moments (SGMM) to control for endogeneity and simultaneity. Data from 40 selected sub-Saharan African countries between 1991 and 2018 are used for the study.

Findings

Empirical results confirm the existence of an average threshold of 31% share of informality in GDP. Also, the paper finds that threshold of informality that addresses mild and severe poverty varies between 24.32 and 36.75%.

Research limitations/implications

The work is limited to African economies. Evidence from other emerging and developed economies is suggested for further research.

Practical implications

Overall, the empirical results indicate a threshold in the informality–poverty nexus. Therefore, an excessive informality level does not benefit the African growth process. Policymakers and governments are advised to operate within the bounds of the threshold of informality that reduces poverty and improve the African economic growth process.

Originality/value

The paper is the first study to provide empirical findings on the nonlinear and threshold argument in the informality–poverty nexus, as far as the authors know.

Details

African Journal of Economic and Management Studies, vol. 15 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 26 September 2023

Hanvedes Daovisan, Sayamol Charoenratana and Motoki Akitsu

Transnational migration is a key challenge in migrant-sending and host-receiving countries. However, relatively little is known about how migrants use network capital to foster…

Abstract

Purpose

Transnational migration is a key challenge in migrant-sending and host-receiving countries. However, relatively little is known about how migrants use network capital to foster small and medium-sized enterprises (SMEs) in the ASEAN Economic Community (AEC). Therefore, the purpose of this study is to explore how network capital fosters Laotian migrant workers in Thai family SMEs.

Design/methodology/approach

This research was conducted using qualitative network analysis (QNA). Referral snowball sampling was used to draw 20 participants from December 2021 to March 2022. Data analysis was performed using Gephi, a software package developed for QNA (coding, network features, measure nodes and network metrics).

Findings

The main findings are the following four emerging themes: chain networks, social networks, human networks and financial networks are associated with network capital for fostering Laotian migrant workers in Thai family SMEs.

Originality/value

To the best of the authors’ knowledge, this study is the first QNA to explore how Laotian migrant workers use network capital in Thai family SMEs.

Details

Journal of Asia Business Studies, vol. 18 no. 1
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 15 February 2024

Zhongwei Sun, Xuchuang Zhang and Xiaofang Wu

This study investigates the mediating role of wage and workforce adjustments, along with the moderating influence of collective bargaining system and employees’ localization, in…

Abstract

Purpose

This study investigates the mediating role of wage and workforce adjustments, along with the moderating influence of collective bargaining system and employees’ localization, in elucidating the relationship between the COVID-19 shock and workplace employee relations (ER) tension.

Design/methodology/approach

Survey data from 1,483 enterprises across 21 prefectural cities in China’s Guangdong Province are collected. The hypotheses are tested by logistic regression.

Findings

The study reveals a positive correlation between the COVID-19 shock and workplace ER tension across crisis-hit enterprises, irrespective of their size or industrial sector. Wage reduction and mass layoffs emerge as significant mediators, while the collective bargaining system (CBS) and employees’ localization act as moderators.

Research limitations/implications

The measurement of ER is limited in a single-item scale. Representation of China is also limited since the study exclusively focuses on Guangdong province. The study offers some contributions that firm-level data reveal the pathway through which COVID-19 creates ER tension.

Practical implications

On the one hand, the authors recommend the establishment of an effective communication system between employers and employees. On the other hand, managers should consider the role of informal institutions. Furthermore, the authors suggest implementing tailored strategies at the enterprise level.

Social implications

Intense external shocks result in widespread layoffs and increased wage reductions within workplaces, and under such circumstances, formal or informal institutions may be insufficient to alleviate ER tension. In this case, the state authorities – including governments and other public agencies or bodies – are necessary to intervene in to organize tripartite dialogue.

Originality/value

While numerous emerging studies on COVID-19 explore how different countries manage industrial relations tension at the national level, few focus on ER at workplace level, particularly in developing countries. Understanding how workplace ER evolve during external shocks and identifying institutional measures to mitigate their negative impact is crucial for future crisis management.

Details

Employee Relations: The International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0142-5455

Keywords

Article
Publication date: 18 October 2023

Lokesh Posti, Vaibhav Bhamoriya, Rahul Kumar and Rajan Khare

Waste management is a crucial aspect of sustainable development, but is it economically sustainable for marginalized informal firms? The study tries to answer this question by…

Abstract

Purpose

Waste management is a crucial aspect of sustainable development, but is it economically sustainable for marginalized informal firms? The study tries to answer this question by revisiting the Porter–Wagner dilemma about the association between environmental management (EM) and firm performance (FP). The study looks into the various liquid waste management practices (LWMPs) adopted by them and the overall impact of LWMPs on firms' economic performance.

Design/methodology/approach

The study uses the latest available cross-sectional data source on Indian informal firms by the National Sample Survey Office (NSSO), 73rd survey round 2015–16. First, ordered logistic regression was used to analyse the factors that impact a firm's adoption of a particular LWMP. Subsequently, to capture the heterogeneity among the firms based on productivity and size, a quantile regression (QR) was employed to analyse the impact of LWMPs on firm productivity. Additionally, the propensity score matching technique was used to address endogeneity concerns.

Findings

The authors find that bigger, urban-located and female-owned firms adopt cleaner LWMPs that positively impact their economic performance. Furthermore, the QR analysis observed that the most productive firms could extract higher returns from adopting cleaner LWMPs, indicating the relevance of the Porter–Wagner dilemma, i.e. environmental and economic sustainability are possibly symbiotic, thus having a feedback mechanism.

Originality/value

To the authors’ limited knowledge, this is the first study analysing the relationship between EM and FP among the informal sector firms, which are away from any regulations or obligations. Since sustainability is a two-way process, policies should be devised that incentivise sustainable business practices.

Details

Management of Environmental Quality: An International Journal, vol. 35 no. 2
Type: Research Article
ISSN: 1477-7835

Keywords

Book part
Publication date: 20 March 2024

Uma Shankar Yadav, Rashmi Aggarwal, Ravindra Tripathi and Ashish Kumar

Purpose: This chapter investigates the current skill gap in small-scale industries, the need for skill development and digital training in micro, small, and medium enterprises…

Abstract

Purpose: This chapter investigates the current skill gap in small-scale industries, the need for skill development and digital training in micro, small, and medium enterprises (MSME), and reviews policies for skill development and solutions.

Need for the Study: While the legislature and organisations have initiated various considerations for the successful implementation of the Skill Development System in the country’s MSMEs, there are significant challenges that must be addressed quickly to fill the skill gap in workers in this digital era.

Research Methodology: Secondary data has been used for the chapter review. Analysis has been done based on review data from women handloom and handicraft workers in the micro or craft industry who received a Star rating from the National Skill Development Corporation (NSDC) partners in Lucknow. For data collection, a questionnaire based on random sampling was used. The data were analysed using a rudimentary weighted average and a percentage technique.

Findings: The studies provide answers to some fundamental problems: are small industry employees indeed mobilised to be skilled outside the official schooling system? Is the training delivery mechanism adequate to prepare pupils for employment? Would industries be willing to reduce minimum qualification criteria to foster skill development?

Practical Implication: Non-technical aptitudes digital and soft skills for workers in this sector should be emphasised in MSMEs, and significant reforms in MSME sectors and capacity-building education and training programmes should be implemented in the Indian industry to generate small and medium enterprises production and employment.

Details

Contemporary Challenges in Social Science Management: Skills Gaps and Shortages in the Labour Market
Type: Book
ISBN: 978-1-83753-165-3

Keywords

Article
Publication date: 12 December 2023

Martin Eloundou Ndzana and Paulin Gregory Mvogo

Recent work in the economics of innovation in developing countries increasingly considers the formality of business as a determining factor of economic development. However…

Abstract

Purpose

Recent work in the economics of innovation in developing countries increasingly considers the formality of business as a determining factor of economic development. However, current knowledge on how formality determines both innovation and business performance remains mixed. This article examines this relationship by analyzing, on the one hand, the role of formality on innovation and, on the other hand, the moderating effect of formality on the relationship between innovation and the performance of business in francophone Sub-Saharan Africa.

Design/methodology/approach

Based on a sample of 1,369 Cameroonian and Senegalese small and medium-sized enterprises (SMEs) from the International Development Research Center (IDRC), the Crepon Duguet et Maraise (CDM) technique was used to reduce the endogeneity bias inherent in this type of analysis.

Findings

The results show that formal companies have a better capacity for innovation. In addition, formality positively moderates the relationship between innovation and the performance of businesses in the case of product and commercial innovations. On the other hand, it negatively moderates the relationship between innovation and the performance for process and organizational innovations.

Practical implications

These results show that the advantages of formalization widely relayed by national public institutions and international organizations can present a risk for business if the expected gains are not accompanied by innovations.

Originality/value

This paper contributes to research by taking into account the heterogeneity of firms because it is one of the first to study formality as a moderator in the relationship between innovation and firm performance in Sub-Saharan African economies.

Details

Journal of Small Business and Enterprise Development, vol. 31 no. 2
Type: Research Article
ISSN: 1462-6004

Keywords

Open Access
Article
Publication date: 20 November 2023

Samuel Arturo Mongrut, Vivian Cruz and Daniela Pacussich

The purpose of this paper is to determine the impact of private and public initiatives (financial literacy, entrepreneurship, remote work and government aid) on individual job…

Abstract

Purpose

The purpose of this paper is to determine the impact of private and public initiatives (financial literacy, entrepreneurship, remote work and government aid) on individual job loss and decrease in income during the COVID-19 pandemic in Peru.

Design/methodology/approach

The authors used an unbalanced panel data analysis with the National Household Survey for 2019–2020. The hypotheses are tested with a probit panel data model since the dependent variables are binary.

Findings

The study findings indicate that financial preparedness reduced the probability of having a decrease in income, but only to informal workers in metropolitan Lima. Furthermore, entrepreneurship helped mainly female informal workers to reduce their probability of becoming unemployed in metropolitan Lima. Besides, the implementation of remote work as a substitute of face-to-face work was not enough to avoid the decrease in income in the case of informal workers and it was only effective to avoid unemployment in the case of formal workers in metropolitan Lima. Finally, public aid proved to be instrumental in mitigating the decrease in income, but only to informal workers in Metropolitan Lima.

Research limitations/implications

The study results only apply for the first year of the pandemic.

Practical implications

Policymakers should focus on increasing the financial preparedness of informal workers, especially in provinces.

Social implications

Policymakers must expand unemployment benefits, and design public aid programs targeting informal workers in provinces.

Originality/value

This is the first study that analyses the impact of private and public initiatives on the decrease in income and unemployment situation of Peruvian individuals during the outbreak of the COVID-19 pandemic.

Details

Journal of Economics, Finance and Administrative Science, vol. 29 no. 57
Type: Research Article
ISSN: 2077-1886

Keywords

Article
Publication date: 15 February 2024

Skylab Sahu

This paper aims to analyse the factors influencing migration, the labour migration process and the status of migrant laborers in the informal sector, particularly those working in…

Abstract

Purpose

This paper aims to analyse the factors influencing migration, the labour migration process and the status of migrant laborers in the informal sector, particularly those working in brick kiln factories. It will shed light on the precarious nature of their work, often characterized by informal and verbal contracts. The paper examines occupational and environmental health hazards affecting the labourers and their impact on their well-being, the vulnerability of women in the precarious work environment and the associated health risks in brick kiln factories in India.

Design/methodology/approach

The study relies primarily on primary data collection, supplemented by secondary literature and documents. Balangir district was chosen as the research region due to its historical deprivation, underdevelopment and the historical prevalence of environmental distress, leading to distress-driven migration. To gather primary data, 40 respondents were selected from five selected blocks in Balangir district, resulting in a total of 200 respondents. In addition, in-depth interviews were conducted with 35 individuals across the selected blocks, with approximately seven participants from each block. In addition, interviews of 10 kids were taken and around 10 key informants including the trade union leaders, intellectuals and civil society activists.

Findings

Migrant labourers, including men, women and children, face significant health issues and are exposed to similar occupational health hazards. Internal migrant women workers are more vulnerable as they face critical health risks during pregnancy in host areas due to unfavourable working conditions and limited access to health-care services. Factors such as strenuous work, long working hours, poor nutrition and inadequate maternal care contribute to adverse outcomes such as spontaneous abortion, premature delivery and abnormal postnatal development.

Research limitations/implications

The brick kiln industry presents a distressing reality for men who are highly vulnerable to occupational accidents, and women workers are exposed to sexual abuse, exploitation and violence. The prevalence of physical harassment, ranging from leering to rape, is alarmingly high among women. These incidents not only inflict physical harm but also cause severe psychological trauma and increase the risk of sexually transmitted diseases. Despite the existence of laws aimed at protecting women’s rights and addressing sexual offences, the workers often remain unaware of their rights. This lack of awareness further compounds the vulnerability of women workers and perpetuates their exploitation in the workplace.

Practical implications

To address health issues comprehensively, interventions should encompass the entire migrant population, including men and children. Strategies should focus on improving access to health-care services, promoting occupational health and safety measures, ensuring proper immunization and nutrition for children and addressing the broader social determinants of health. Empowering women with knowledge about reproductive health and rights, raising awareness about available health-care services and strengthening health-care providers’ capacity to cater to migrant populations are crucial steps towards addressing health disparities.

Social implications

Urgent interventions and policies are needed to address the health vulnerabilities of internal migrant workers and women workers. It is required to ensure health-care accessibility, improving working conditions, ensuring access to maternal care and essential supplements and providing health-care services for both pregnant women and their children, regardless of migration status.

Originality/value

The study focused on precarious health and occupational hazards and accidents faced by migrant workers. It highlights women migrant labourer’s and children’s vulnerability in the Brick Klin sector, which is a value addition to the existing knowledge in social science.

Details

International Journal of Migration, Health and Social Care, vol. 20 no. 1
Type: Research Article
ISSN: 1747-9894

Keywords

Abstract

Purpose

The purpose of this study is to investigate the role of sales, as a proxy for size, in moderating the impact of institutional incongruence between formal and informal institutions on the formalization of microenterprises in middle-income countries in Latin America.

Design/methodology/approach

The paper uses a probit regression model to examine business formalization as a binary outcome of formal and informal institutions. Data was collected through interviews and surveys across 52 municipalities in the Metropolitan Region of Santiago, Chile. The study used a stratified sampling approach and was conducted between November 2022 and January 2023.

Findings

The results offer three key insights into the formalization of microenterprises in middle-income countries. First, we show that formal institutions do not significantly influence formalization decisions among microentrepreneurs in middle-income countries, challenging the traditional belief that formal institutions alone significantly influence formalization in these contexts. Second, we show that informal institutions are significant predictors of informality, especially among smaller microenterprises. Third, we highlight that the smaller the business, the stronger the negative effect of informal institutions on formalization, and thus, the institutional incongruence between formal and informal institutions decreases for larger businesses.

Originality/value

This paper contributes to management literature by shedding light on the drivers of formalization in middle-income countries, a departure from most formalization studies wherein the focus is primarily on low-income economies. The findings suggest that policymakers in middle-income countries should focus on enabling microenterprise growth through sales, rather than targeting specific demographic groups or relying solely on formal institutional enforcement to promote formalization.

Propósito

El objetivo de este estudio es investigar el papel de las ventas, utilizadas como un indicador de tamaño, en la mediación del impacto de la incongruencia institucional entre instituciones formales e informales en la formalización de microempresas en países de ingresos medios en América Latina.

Método

Utilizamos un modelo de regresión Probit para examinar la formalización empresarial como un resultado binario de instituciones formales e informales. Los datos se recopilaron a través de 110 entrevistas y encuestas en 52 municipios de la Región Metropolitana de Santiago, Chile. El estudio empleó un enfoque de muestreo estratificado y se llevó a cabo entre noviembre de 2022 y enero de 2023.

Hallazgos

Nuestros resultados ofrecen tres ideas clave sobre la formalización de microempresas en países de ingresos medios. Primero, demostramos que las instituciones formales no influyen significativamente en las decisiones de formalización entre las microempresas en países de ingresos medios; esto desafía la creencia tradicional de que las instituciones formales por sí solas influyen significativamente en la formalización en estos contextos. Segundo, nuestro estudio muestra que las instituciones informales son predictores significativos de la informalidad, especialmente entre las microempresas más pequeñas. Tercero, nuestro estudio destaca que el efecto negativo de las instituciones informales sobre la formalización es más fuerte para negocios de menor tamaño; por lo tanto, la incongruencia institucional entre instituciones formales e informales disminuye para negocios de mayor tamaño.

Originalidad

Este artículo contribuye a la literatura iluminando sobre los impulsores de la formalización en países de ingresos medios, a diferencia de la mayoría de los estudios de formalización en la región latinoamericana que se centran principalmente en países de bajos ingresos. Nuestros hallazgos sugieren que los responsables de políticas en países de ingresos medios deberían centrarse en impulsar el crecimiento de las microempresas a través de las ventas, en lugar de enfocarse en grupos demográficos específicos o depender únicamente del cumplimiento institucional formal para promover la formalización.

Propósito

O objetivo deste estudo é investigar o papel das vendas, usadas como um indicador de tamanho, na mediação do impacto da incongruência institucional entre instituições formais e informais na formalização de microempresas em países de renda média na América Latina.

Método

Utilizamos um modelo de regressão Probit para examinar a formalização empresarial como um resultado binário de instituições formais e informais. Os dados foram coletados por meio de 110 entrevistas e pesquisas em 52 municípios da Região Metropolitana de Santiago, Chile. O estudo empregou uma abordagem de amostragem estratificada e foi realizado entre novembro de 2022 e janeiro de 2023.

Resultados

Nossos resultados oferecem três ideias-chave sobre a formalização de microempresas em países de renda média. Primeiro, demonstramos que as instituições formais não influenciam significativamente as decisões de formalização entre as microempresas em países de renda média; isso desafia a crença tradicional de que as instituições formais, por si só, influenciam significativamente a formalização nesses contextos. Segundo, nosso estudo mostra que as instituições informais são preditores significativos da informalidade, especialmente entre as microempresas menores. Terceiro, nosso estudo destaca que o efeito negativo das instituições informais sobre a formalização é mais forte para negócios de menor porte; portanto, a incongruência institucional entre instituições formais e informais diminui para negócios de maior porte.

Originalidade

Este artigo contribui para a literatura iluminando os impulsionadores da formalização em países de renda média, ao contrário da maioria dos estudos de formalização na região latino-americana, que se concentram principalmente em países de baixa renda. Nossos achados sugerem que os responsáveis pelas políticas em países de renda média deveriam focar em impulsionar o crescimento das microempresas por meio das vendas, em vez de se concentrar em grupos demográficos específicos ou depender exclusivamente do cumprimento institucional formal para promover a formalização.

Article
Publication date: 6 February 2024

Bighnesh Dash Mohapatra, Chandan Kumar Sahoo and Avinash Chopra

The purpose of this study is to explore and prioritize the factors that determine the social insurance contribution of unorganized workers.

Abstract

Purpose

The purpose of this study is to explore and prioritize the factors that determine the social insurance contribution of unorganized workers.

Design/methodology/approach

A two-stage procedure was adopted to recognize and prioritize factors influencing the social insurance participation of unorganized workers: first, crucial factors influencing unorganized workers’ contribution towards social insurance were identified by employing exploratory factor analysis, and in the second phase, the fuzzy analytical hierarchal process was applied to rank the specified criteria and then sub-criteria by assigning weights.

Findings

Four broad factors were identified, namely, economic, political, operational and socio-psychological, that significantly influence unorganized workers’ contribution towards social insurance. Later findings revealed that the prime influencer of unorganized workers’ contribution is employment contracts followed by average earnings, delivery of quality services, eligibility and accessibility.

Practical implications

The research findings are feasible as the basic propositions are based on real-world scenario. The identification and ranking of factors have the potential to be used as a checklist for policymakers when designing pension and social insurance for unorganized workers. If it is not possible to consider all, the criteria and sub-criteria assigned upper rank can be given priority to extend pension coverage for a large group of working poor.

Social implications

The key factors driving social insurance contributions have been highlighted by studying the stakeholders’ perceptions at a micro level. By comprehending the challenges, there is a possibility of covering a large section of the working poor into social insurance coverage.

Originality/value

This paper is believed to be one of its kinds to acknowledge a combination of factors that determine the contribution of unorganized workers to social insurance. This study is an empirical investigation to prioritize the essential drivers of social insurance participation by low-income cohorts in the context of emerging countries. The present approach of employing fuzzy logic has also very limited use in social insurance literature yet.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

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